American’s Wages Are Rising

Conn Carroll /
June 18, 2008

It is an unquestioned doctrine of faith on the left that the American worker has not shared in the United States phenomenal economic growth since the late 1970s. Supporting their claims, the left often points to data like the chart below showing median household income falling far behind gains in productivity:
But as Heritage scholar James Sherk documents, just looking at workers income is extremely misleading since it leaves out all the benefits firms pay workers in the form of health coverage, 401(k)s, and sick leave. Once the growth in the value of these economic benefits is factored in we see that American wages have been growing steadily along with productivity:
In fact if we look at employee compensation as a share of share of national income since 1970 we see that it reached a high of 73.5% in 1980, a low of 69.2% in 1997 and rests at roughly 70.6% today: